Bangladesh exports garments to India duty free for first time

DHAKA: Bangladesh has exported garments to India for the first time under a duty-free access deal seen as a breakthrough for the country's fast-growing textile industry, an official said on Monday.

Neighbours Bangladesh and India signed the deal last September, allowing Dhaka to annually export eight million garments duty-free across the border, an agreement hailed by New Delhi as a "milestone" in trade relations.

"Our companies have for the first time in history shipped garments to India this month under a duty-free access deal," said Anwar-ul Alam Chowdhury Parvez, president of Bangladesh Garments Manufacturers and Exporters Association.

"We've exported a small quantity, but it's a giant leap for the industry. It is projected that India's ready-made garments market would top 100 billion dollars by 2012. Our target is to get a slice of this huge market," he added.

Bangladesh, which has a two-billion-dollar trade gap with India, last year exported more than nine billion dollars of textiles, mainly to the United States and the European Union.

The country's textile export market is growing rapidly, spurred by a weak Bangladeshi currency and a sharp increase in production costs in China and Vietnam, its main global rivals.

The improvement in trade relations comes against a backdrop of sometimes tense relations between the neighbours.
India helped Bangladesh win independence from Pakistan in 1971 but ties in recent years have often been soured by border skirmishes for which both sides blame the other.

Indian officials regularly accuse Bangladesh of harbouring militants fighting New Delhi's rule in India's far-flung northeast.

Dhaka denies the charge and says New Delhi allows Bangladeshi criminals to take refuge on its soil.